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Takeaway: Remain negative on Macau stocks following another poor week of revenues

Week 2 average daily table revenues (ADTR) fell 25% from the comparable period last year. Month to date ADTR is down 26% YoY, worse than we expected.  Given the 2nd straight disappointing week, we’re lowering our full GGR October YoY growth forecast to down 20-25% from down 15-20%.

MACAU: NO REBOUND IN WEEK 2 - m1

Some market participants and investors have been expecting a better turnout from VIPs this past week with the theory that they were escaping the Golden Week limelight.  From the numbers, it is apparent that many VIPs continue to stay away altogether.  We’ve received reports of weak casino traffic this past weekend which isn’t surprising post Golden Week.  Hold percentage was likely more normal this past week but still likely below normal for the first half of October given the results from week 1.

In terms of market share, MPEL and LVS are performing well above trend while Wynn and Galaxy remain below.  We wouldn’t read into the early month market shares as hold percentage is the likely culprit for the shifts. 

SJM benefited this past week from a couple of large VIP punters.  Overall, the Peninsula properties seem to be outperforming Cotai partially due to disappointing mass volumes. 

MACAU: NO REBOUND IN WEEK 2 - M2 

We remain negative overall on the Macau stocks as revenues remain under pressure and Street estimates do not appear to account for the significant margin pressure we are expecting.  We were in Macau last week so if you’d like an update on our findings please don’t hesitate to reach out.